By
Andrew Agbo Abu
Nigeria’s technology ecosystem is brimming with potential, yet access to funding remains a persistent challenge. Despite the existence of funding instruments like the CBN intervention funds, the Development Bank of Nigeria (DBN) innovation financing, and Bank of Industry (BOI) startup support, the disbursement of these funds has not been effectively structured to support the real needs of tech startups.
Now, with Dr. Bosun Tijani as the Honourable Minister of Communications, Innovation & Digital Economy, the time is ripe for a strategic collaboration between the Ministry, CBN, DBN, BOI, NITDA, and NSIA to establish a structured funding model that aligns with the Startup Act and provides accessible financing for Nigerian innovators.
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Leveraging the Startup Act for Sustainable Tech Financing
The Nigeria Startup Act (NSA) was designed to stimulate innovation, encourage foreign investment, and provide structured incentives for startups. However, its impact can only be fully realized if financial institutions actively leverage its provisions to channel funding into the ecosystem. The following strategies can ensure that:
1. Creation of a Dedicated Startup Investment Fund:
The CBN, in collaboration with DBN, BOI, and NSIA, should establish a dedicated Startup Investment Fund that deploys financing to certified startups under the Startup Act framework. This will reduce bureaucracy and ensure that funds reach the right hands.
2. Low-Interest Loans & Credit Guarantees:
Many startups struggle with access to credit due to a lack of collateral. DBN and BOI can introduce low-interest loan facilities and credit guarantees to encourage banks to lend to early-stage tech businesses without excessive risk concerns.
3. Equity-Based Funding & Public-Private Partnerships (PPPs):
CBN and BOI can structure equity-based funding schemes where startups receive direct capital injections in exchange for minority government stakes, ensuring long-term sustainability. NSIA, as Nigeria’s sovereign wealth fund manager, should allocate resources for strategic investment in promising startups, especially in high-growth sectors like fintech, AI, and health tech.
4. Sector-Specific Funding for High-Growth Tech Verticals:
Fintech, HealthTech, EdTech, AgriTech, and AI-driven startups should have sector-specific funding windows that cater to their unique needs. For example, a Smart Agriculture Innovation Fund can support startups using AI, IoT, and blockchain to improve Nigeria’s agricultural value chain.
5. Deployment of Innovation Hubs & Incubation Programs:
BOI, NSIA, and DBN should work with NITDA to fund innovation hubs across Nigeria, particularly in underrepresented regions. These hubs should serve as incubation centers where startups receive both funding and business development support. NITDA’s experience in digital innovation and startup incubation makes it a key facilitator of capacity-building programs for tech entrepreneurs.
The Role of NITDA and NSIA in Strengthening the Ecosystem
NITDA (National Information Technology Development Agency) has been at the forefront of digital transformation in Nigeria. Under the Startup Act, NITDA must play a coordinating role in ensuring policy implementation and providing technical support for digital enterprises. With its experience in managing initiatives like the Technology Innovation & Entrepreneurship Support Scheme (TIES) and the Nigeria Data Protection Act (NDPA) 2023, NITDA can develop frameworks that enable access to funding, ease of business registration, and regulatory clarity for startups.
On the other hand, NSIA (Nigeria Sovereign Investment Authority) has the financial leverage to become a catalyst for tech investment. By creating a dedicated Innovation and Digital Economy Investment Fund, NSIA can drive capital inflows into Nigerian startups, de-risk investments, and attract global venture capitalists to co-invest in the ecosystem.
Conclusion: A Call to Action
To truly unlock the potential of Nigeria’s digital economy, Dr. Bosun Tijani must spearhead an initiative that brings together CBN, DBN, BOI, NITDA, and NSIA to establish a structured, transparent, and accessible funding mechanism for startups. The Startup Act provides the legal framework, but financial institutions and key agencies must operationalize it effectively to drive real impact.
The Nigerian tech ecosystem has the talent, ideas, and market potential—what it needs now is strategic funding and policy-backed execution to propel it into a new era of innovation and economic growth.
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